Government near to announce 7th Pay Commission award despite Brexit vote

New Delhi: 7th Pay Commission award is close to announce despite Britain’s vote to leave the EU, as potentially boosts the central government employees's survival prospects.

Finance Minister Arun Jaitley will make pay hike announcement for central government employees in July or August.

Country's top economic experts have said the 7th Pay Commission award faces a new crisis after the referendum result, so the government to keep 7th Pay Commission award in abeyance as it is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 per cent of GDP, on the exchequer in 2016-17, according to reports.

Sources familiar with the Finance Ministry, however, say the Empowered Committee of Secretaries headed by Cabinet Secretary P K Sinha is still working on the process of 7th Pay Commission recommendations to keep government promise, and that pay hike could help 4.8 million central government employees and 5.2 million central pensioners.

A senior source close to the PMO said government was still likely to keep the 7th Pay Commission recommendations process, which would be a boost to its employees, whose efforts to help the government business. The source said, “Unless something drastic happens, then in July or August, Finance Minister Arun Jaitley will make pay hike announcement for central government employees.”

The government believes the impact of Britain voting to leave the EU, which threatens to spark uncertainty for Indian economy, could be softened by the weakening of rupee. The rupee fell to 68.22, the lowest level since March 1 against the dollar on Friday.

However amid mounting fears of inflation for Brexit vote, the Empowered Committee of Secretaries is going to recommend 30 per cent hike in salaries of central government employees in its next two meetings, that would take the minimum basic monthly pay to Rs 23,500 and the maximum to Rs 3,25,000.

The 7th Pay Commission headed by Justice A K Mathur had suggested a maximum basic pay of Rs 2,50,000 and a minimum of Rs 18,000.

The basic pay and pension will have retroactive effect from January 1, 2016, but the allowances would be paid from the implemented date of 7th Pay Commission.

TST